AGREEMENT FOR TRANSFER OF OWNERSHIP INTERESTS

Exhibit 10.1

AGREEMENT FOR TRANSFER

OF

OWNERSHIP INTERESTS

between

Vaughan Mills Advisory Services, Inc., a Delaware corporation,

as sole trustee of

Vaughan Mills Irrevocable Grantor Trust,

a Virginia irrevocable grantor trust,

Vaughan Mills Residual Inc.,

an Ontario corporation,

Vaughan Mills Advisory Services, Inc.,

a Delaware corporation,

St. Enoch, L.L.C.,

a Delaware limited liability company,

Mills Global Investments of UK, L.L.C.,

a Delaware limited liability company, and

Mills Global Services of UK Limited

a company organized under the laws of England and Wales,

collectively, as transferors

and

Ivanhoe Cambridge II Inc., an Ontario corporation, and

4352769 Canada Inc., a Canada corporation

collectively as transferees

Dated: As of October 4, 2006

AGREEMENT FOR TRANSFER OF OWNERSHIP INTERESTS

THIS AGREEMENT FOR TRANSFER OF OWNERSHIP INTERESTS (this “ Agreement ”) is made and dated as of the 4th day of October, 2006, by and among VAUGHAN MILLS ADVISORY SERVICES, INC., a Delaware corporation (“ Vaughan Advisory ”), as sole trustee of Vaughan Mills Irrevocable Grantor Trust, a Virginia irrevocable grantor trust (the “ Vaughan Trust ”), VAUGHAN MILLS RESIDUAL INC., an Ontario corporation (“ Vaughan Residual ”), ST. ENOCH, L.L.C., a Delaware limited liability company (“ St. Enoch LLC ”), MILLS GLOBAL INVESTMENTS OF UK, L.L.C., a Delaware limited liability company (“ Mills UK ”), MILLS GLOBAL SERVICES OF UK LIMITED, a company organized under the laws of England and Wales (“ Mills Global ”), each having an office at c/o The Mills Corporation, 5425 Wisconsin Avenue, Suite 500, Chevy Chase, Maryland 20815, and IVANHOE CAMBRIDGE II INC., an Ontario corporation (“ Ivanhoe II ”) and 4352769 CANADA INC. (“ Ivanhoe Newco ”) each having an office at Centre CDP Capital, 1001 Square Victoria, Suite C-500, Montréal (Québec), Canada H2Z 2B5.

RECITALS

A. The Vaughan Trust owns a 50% undivided tenant-in-common beneficial interest in the Vaughan Mills Property which is registered in the name of its sole trustee, Vaughan Advisory.

B. Ivanhoe II owns the remaining 50% undivided tenant-in-common interest in the Vaughan Mills Property that is not currently owned by the Vaughan Trust.

C. Vaughan Residual owns a 50% undivided tenant-in-common beneficial interest in the Vaughan Mills Peripheral Property which is registered in the name of Vaughan Advisory.

D. Ivanhoe II owns the remaining 50% undivided tenant-in-common interest in the Vaughan Mills Peripheral Property that is not currently owned by Vaughan Residual.

E. The Vaughan Mills Property and the Vaughan Mills Peripheral Property together constitute the shopping center known as Vaughan Mills in Ontario, Canada (the “ Vaughan Mills Shopping Centre ”).

F. The Vaughan Trust owns 50 common shares (the “ Mills VMSCC Shares ”) in Vaughan Mills Shopping Centre Corporation, a Nova Scotia unlimited liability corporation (“ VMSCC ”), which leases the Vaughan Mills Property from Vaughan Advisory, as sole trustee of the Vaughan Trust, and Ivanhoe II, as tenants-in-common, pursuant to the Vaughan Mills Building Lease.

G. Ivanhoe II owns the remaining 50 common shares in VMSCC that are not owned by the Vaughan Trust.

H. St. Enoch LLC owns 20,375.50 units (the “ Mills Trust Units ”) in St. Enoch Centre Unit Trust, a unit trust scheme pursuant to Article 7(3) of the Trusts (Jersey) Law, 1984 (as amended) (the “ St. Enoch Trust ”) that owns the St. Enoch Property.

I. Canada Inc. owns the remaining 20,375.50 units in the St. Enoch Trust that are not currently owned by St. Enoch LLC.

J. Mills UK owns 500 ordinary “A” shares (the “ Mills Trustee Shares ”) in St. Enoch Trustee Company Limited (“ St. Enoch Trustee ”), a company organized under the laws of Jersey (Channel Islands), which is the trustee of the St. Enoch Trust.

K. Ivanhoe owns the remaining 500 ordinary “B” shares in St. Enoch Trustee owned by Mills UK.

L. The St. Enoch Property constitutes the shopping centre known as St. Enoch in Glasgow, Scotland.

M. The Mills Transferors desire to sell the Mills Interests (as hereinafter defined) to the Ivanhoe Transferee and the Ivanhoe Transferee desires to purchase the Mills Interests, all subject to and on the terms and conditions more particularly set forth herein.

NOW, THEREFORE, in consideration of the mutual covenants herein contained and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:

1. Definitions . For purposes of this Agreement, the term(s):

1.1. “ Affiliate ” means, at any time, and with respect to any Person, any other Person that at such time directly or indirectly Controls, or is Controlled by, or is under common Control with, such first Person, provided that no Joint Entity shall be considered to be an Affiliate of any of the Mills Transferors or any Ivanhoe Transferee for purposes of this definition. As used in this definition, “ Control ” means the possession, directly or indirectly, of the power to direct or cause the direction of the management and decision-making of a Person.

1.2. “ Aggregate Termination Payments ” has the meaning set forth in Section 2.12(b) .

1.3. “ Agreement ” has the meaning set forth in the introductory paragraph hereto.

1.4. “ Applicable Laws ” means all statutes, laws, by-laws, regulations, ordinances, orders and requirements of any Governmental Authority having jurisdiction.

1.5. “ Applicable Rate ” means, at any particular time, the lesser of (x) four hundred (400) basis points above the “prime rate”, as published by the Wall Street Journal, or (y) the maximum rate permitted by Applicable Laws at such time.

 

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1.6. “ Arrears ” has the meaning set forth in Section 2.3(i) .

1.7. “ Balance ” means the Purchase Price as adjusted pursuant to Sections 2.2(a) and 2.3 .

1.8. “ Bankruptcy Code ” means 11 U.S.C. Section 101 et seq., or any statute of similar nature or purpose under United States, Canadian, British, European Union or other laws.

1.9. “ Basket Amount ” means Two Hundred and Fifty Thousand Dollars (US$250,000).

1.10. “ Bulk Sales Act ” means the Bulk Sales Act (Ontario).

1.11. “ Bulk Sales Indemnity ” means an indemnity from the Mills Transferors and TMLP jointly and severally indemnifying and saving harmless all Persons comprising the Ivanhoe Transferee from all Claims incurred, suffered or sustained by the Ivanhoe Transferee as a result or arising out of non-compliance by the Mills Transferors with the provisions of the Bulk Sales Act (or any amendments thereto).

1.12. “ Business Day ” means any day other than a Saturday, Sunday or a statutory holiday in any of Toronto, Ontario, Glasgow, Scotland, Jersey, Channel Islands, or New York, New York.

1.13. “ Canada Inc. ” means 4259050 Canada Inc.

1.14. “ Chattels ” means all equipment, inventory, vehicles, furniture, supplies and other chattels or tangible personal property located at or in any Property or used in the maintenance, repair and operation of any Property (including, without limitation, all computer hardware and software and all operating manuals in respect of any equipment (other than Excluded Management Assets)) other than such property which is owned by any Tenant.

1.15. “ Claims ” means all past, present and future claims, complaints, suits, proceedings, liabilities, obligations, losses, damages, penalties, judgments, awards, costs, expenses, fines, disbursements, reasonable legal fees and disbursements, interest, demands and actions of any nature or any kind whatsoever.

1.16. “ Closing ” means the completion of the Transactions.

1.17. “ Closing Adjustment Date ” means August 31, 2006.

1.18. “ Closing Adjustments ” means the adjustments to the Purchase Price provided for in Sections 2.1(f), 2.2(a), 2.3 and 2.12(b) .

1.19. “ Closing Date ” means the date of Closing.

1.20. “ Closing Deliveries Escrow Agent ” means Davies Ward Phillips & Vineberg LLP or, in the case of the deliveries in respect of the Mills Trustee Shares, the Mills St.

 

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Enoch Inter-Company Loans, the Mills Trust Units and related Mills Interests, Paul, Hastings, Janofsky & Walker (Europe) LLP.

1.21. “ Closing Deliveries Escrow Agreement ” means an escrow agreement pursuant to which all Closing Documents are held in escrow pending completion of the Closing, in the form to be agreed upon by the Mills Transferors, the Ivanhoe Transferee and the Closing Deliveries Escrow Agent, each acting reasonably.

1.22. “ Closing Documents ” means the agreements, instruments and other deliveries to be delivered by the Ivanhoe Transferee or its solicitors (or by either of them) pursuant to Section 4.2 and the agreements, instruments and other deliveries to be delivered by the Mills Transferors or their solicitors (or either of them) pursuant to Section 4.1 .

1.23. “ Competition Act ” means the Competition Act (Canada).

1.24. “ Contracts ” means: (i) all contracts and agreements with Third Parties (other than Leases and policies of insurance) relating exclusively to any of the Properties to which any one or more of the Mills Transferors or the Joint Entities is a party or by which any one or more of the Mills Transferors, the Joint Entities or the Properties are bound in connection with the development, servicing, ownership, management, maintenance, operation, cleaning, security, protection or servicing of any of the Properties (including, without limitation, the Savills Agreement), and (ii) all of the Mills Service Contracts and all Designated Contracts, if any; without limiting the foregoing, it is confirmed that none of the Management Arrangements, the Operative Agreements, the St. Enoch Loan Documents and/or the Vaughan Mills Loan Documents constitutes a Contract.

1.25. “ Cut-Off Date ” means the last Business Day prior to the date of this Agreement.

1.26. “ DB Agreement ” has the meaning set forth in Section 3.2(c) .

1.27. “ Designated Contracts ” has the meaning set forth in Section 2.12(a) .

1.28. “ Deutsche Bank ” means Deutsche Bank AG London.

1.29. “ Employees ” means the St. Enoch Employees and the Vaughan Mills Employees, collectively.

1.30. “ Employee Information ” means all files (other than health records) relating to any of the Vaughan Mills Employees or the St. Enoch Employees in the possession of the Mills Transferors or their Affiliates.

1.31. “ Employee Plans ” means any insurance plans providing for disability, hospitalization, healthcare, medical or dental treatments or expenses, life insurance, accidental death and dismemberment insurance, death or survivor’s benefits and supplementary employment insurance, in each case regardless of whether or not such benefits are insured or

 

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self-insured, which are maintained, or otherwise contributed to or required to be contributed to in respect of any of the Employees.

1.32. “ Encumbrances ” means, in the case of any given assets or property (whether tangible or not), all mortgages, pledges, charges, liens, debentures, hypothecs, trust deeds, assignments by way of security, security interests, conditional sales contracts or other title retention agreements or similar interests or instruments charging, or creating a security interest in, such assets or property or any part thereof or interest therein, and any agreements, Leases, options, easements, rights of way, restrictions, executions or other encumbrances (including notices or other registrations in respect of any of the foregoing) affecting title to such assets or property or any part thereof.

1.33. “ Escrowed Amount ” has the meaning set forth in Section 2.2(c) .

1.34. “ Escrowed Funds Agreement ” means an escrow agreement pursuant to which the Escrowed Amount is held in escrow in accordance with Section 2.2(c) hereof, which agreement shall be in the form attached hereto as Schedule T .

1.35. “ Escrowed Funds Escrow Agent ” means Davies Ward Phillips & Vineberg LLP.

1.36. “ Excise Act ” means the Excise Tax Act (Canada), as the same may be amended from time to time.

1.37. “ Excluded Management Assets ” means the software applications listed on Schedule P .

1.38. “ Existing Breach ” means any breach of the Property Representations caused by, or arising out of, any action, event, circumstance, fact or document that has occurred on or before, or is in existence as of, the Cut-Off Date.

1.39. “ Existing Debt ” means, collectively, the St. Enoch Debt and the Vaughan Mills Debt.

1.40. “ Final Adjustment Date ” has the meaning set forth in Section 2.3(f) .

1.41. “ Goldman Loan Agreement ” means that certain Credit and Guaranty Agreement, dated as of May 19, 2006, among TMLP, as borrower, Mills Corp., certain of its Subsidiaries, various lenders set forth therein, and Goldman Sachs, as administrative agent, collateral agent, lead arranger, and syndication agent, and all other documents executed in connection therewith, as the same may be amended.

1.42. “ Goldman Sachs ” means Goldman Sachs Mortgage Company.

1.43. “ Governmental Authority ” means any government, legislature, municipality, regulatory authority, agency, commission, department, board or court or other law, regulation or rule-making entity (including, without limitation, a Minister of the Crown).

 

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1.44. “ GST ” means goods and services tax payable pursuant to the Excise Act.

1.45. “ GST Undertaking and Indemnity ” means an undertaking and indemnity by Ivanhoe II in favour of the Mills Transferors with respect to GST payable under the Excise Act in respect of the Transactions.

1.46. “ IC Fees ” means, as of any particular time: (i) all fees and other amounts under the leasing agreement for the Vaughan Mills Property listed in the Operative Agreements; and (ii) all tenant co-ordination fees for the Vaughan Mills Property in each case then payable or reimbursable to Ivanhoe or any of its Affiliates by one or more of the Joint Entities.

1.47. “ Inaccurate Property Representations Liability Cap ” means Three Million Five Hundred Thousand Dollars (US$3,500,000).

1.48. “ Indemnitee ” has the meaning set forth in Section 10.1 .

1.49. “ Indemnitor ” has the meaning set forth in Section 10.1 .

1.50. “ Intellectual Property ” means the trade names, trade marks, logos, commercial symbols, business names and/or domain names described on Schedule J .

1.51. “ ITA ” means the Income Tax Act (Canada).

1.52. “ Ivanhoe ” means Ivanhoe Cambridge Inc.

1.53. “Ivanhoe Indemnity” means the indemnity by Ivanhoe in favour of the Mills Transferors in respect of any Claims made by the Mills Transferors in respect of any breach of the representations and warranties made by the Ivanhoe Transferee in Section 2.10, such indemnity to be in form and substance satisfactory to Ivanhoe and the Mills Transferors, each acting reasonably.

1.54. “Ivanhoe II” means Ivanhoe Cambridge II Inc.

1.55. “Ivanhoe Newco” means 4352769 Canada Inc.

1.56. “ Ivanhoe St. Enoch Manager ” means Ivanhoe UK Management Services Ltd.

1.57. Ivanhoe-TMLP Release ” has the meaning set forth in Section 2.11(c) .

1.58. “ Ivanhoe Transferee ” means Ivanhoe II and Ivanhoe Newco and, if applicable, any Qualified Designees who purchase any of the Mills Interests.

1.59. “ Ivanhoe VMSCC Mills Transferors Indemnity ” has the meaning set forth in Section 2.11(g).

1.60. “ Investor Priority Agreement ” means the Investor Priority Agreement in respect of the St. Enoch Trust, dated January 31, 2005, in favour of Deutsche Bank.

 

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1.61. “ Joint Entities ” means VMSCC, the St. Enoch Trust, and the St. Enoch Trustee.

1.62. “ JV Release ” has the meaning given to it in Section 2.11(a) .

1.63. “ Known by the Purchaser ” means any Lease, Contract, Encumbrance or other document or information (i) which has previously been specifically approved by Ivanhoe II, Ivanhoe or any direct or indirect Subsidiary of Ivanhoe; (ii) has been signed by the Ivanhoe Transferee, Ivanhoe or any direct or indirect Subsidiary of Ivanhoe or any of their officers or other employees signing in their capacity as officers of any of the Joint Entities; (iii) that has been made available for review by the Ivanhoe Transferee and is listed in Schedule I hereto; or (iv) that is actually known on the Cut-Off Date by John Comery, Paul Chehab, Heather Morrison, Claude Dion, Paul Harrs, Pierre Lalonde or Paul Gleeson.

1.64. “Leases ” means all agreements to lease, leases, renewals of leases, subtenancy agreements, parking agreements, storage agreements and other agreements (including licences) which entitle any Third Party to possess or occupy any space within any Property, together with all security, guarantees and indemnities relating thereto, in each case as amended, renewed or otherwise varied; for greater certainty, it is confirmed that the Vaughan Mills Building Lease is not a Lease.

1.65. “ Leasing Costs ” means all leasing commissions, tenant inducements, tenant allowances (excluding rent-free periods and rent abatements), the costs of leasehold improvements or other landlord’s work to the relevant space or to any other portions of any Property necessary to facilitate the leasing of the relevant space, capital and other contributions, the costs of any lease take-overs, relocations, assumptions, indemnities or assignments or similar commitments, and all other costs payable by the owners of any Property (or the lessor); in every case in respect of, in connection with, or pursuant to any Leases.

1.66. “ Madrid Xanadu Agreements ” means collectively: (i) the Agreement for Contribution of Shares made as of the date hereof between Jahold B.V. and Golober B.V., as contributors, and Ivanhoe Netherlands Holdings III B.V., as contributee, and (ii) the Share Purchase Agreement made as of the date hereof between Jahold B.V., Golober B.V. and Ivanhoe Netherlands Holdings II B.V. as such agreements may be amended from time to time.

1.67. “ Management Arrangements ” means (a) with respect to the Vaughan Mills Property, the management arrangements set forth in the section entitled “Operations” in Schedule H of the Vaughan Co-Owners Agreement, and substantially settled upon in the draft management agreement under which the parties hereby acknowledge that the Vaughan Mills Manager has been acting in its capacity as property manager, (b) with respect to the St. Enoch Property, the draft management agreement, draft development agreement and draft leasing agreement set forth on Schedule F under which the parties hereby acknowledge that Mills Global has been acting as property, development and leasing manager.

1.68. “ Management Termination and Release ” has the meaning set forth in Section 2.11(b) .

 

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1.69. “ Master Agreement ” means that certain Master Agreement, dated as of October 14, 1999, between TMLP, Ivanhoe II, successor in interest to Cambridge Shopping Centres Limited, and Mills Corp., as the same may have been amended to the date hereof.

1.70. “ Master Agreement Amendment ” has the meaning set forth in Section 2.4(c) .

1.71. “ Mills’ Broker ” has the meaning set forth in Section 7 .

1.72. “ Mills Corp. ” means The Mills Corporation, a Delaware corporation.

1.73. “ Mills Entity ” means any of the Mills Transferors or any Affiliate thereof.

1.74. “ Mills Fees ” means, as of any particular time, all fees and other amounts then payable or reimbursable under the Management Arrangements to the Vaughan Mills Manager or Mills Global by one or more of the Joint Entities.

1.75. “ Mills Global ” has the meaning set forth in the introductory paragraph hereto.

1.76. “ Mills Interests ” means, collectively, the Vaughan Mills Subject Assets, the Vaughan Mills Peripheral Property Subject Assets, the Mills VMSCC Shares, the Mills Trust Units, the Mills Trustee Shares and the Mills St. Enoch Inter-Company Loans and all rights, benefits and interests relating thereto including, without limitation, all Chattels.

1.77. “ Mills Inter-Company Loans ” means those certain loans made by Mills Entities to any of the Joint Entities, as more particularly described on Schedule G .

1.78. “ Mills Licensing Agreement ” means the licensing agreement attached as a schedule to the Master Agreement Amendment.

1.79. “ Mills Service Contracts ” has the meaning set forth in Section 2.12(a) .

1.80. “ Mills St. Enoch Inter-Company Loans ” means all of the Mills Inter-Company Loans relating to St. Enoch, as described in Schedule G .

1.81. “ Mills St. Enoch Trustee Directors ” means the Persons listed on Schedule K-1 , in their capacities as directors of the St. Enoch Trustee.

1.82. “ Mills St. Enoch Trustee Directors Release ” has the meaning set forth in Section 2.11(d) .

1.83. “ Mills Transferors ” means, collectively, Vaughan Advisory, the Vaughan Trust, Vaughan Residual, St. Enoch LLC and Mills UK.

1.84. “ Mills Trust Units ” has the meaning set forth in the Recitals hereto.

1.85. “ Mills Trustee Shares ” has the meaning set forth in the Recitals hereto.

 

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1.86. “ Mills UK ” has the meaning set forth in the introductory paragraph hereto.

1.87. “ Mills VMSCC Directors and Officers ” means the Persons listed on Schedule K-2 , in their capacities as directors or officers of VMSCC.

1.88. “ Mills VMSCC Directors and Officers Release ” has the meaning set forth in Section 2.11(d) .

1.89. “ Mills VMSCC Inter-Corporate Loans Release ” has the meaning set forth in Section 2.11(f).

1.90. “ Mills VMSCC Shares ” has the meaning set forth in the Recitals hereto.

1.91. “ Non-Assignable Rights ” has the meaning ascribed thereto in Section 2.12(a) .

1.92. “ Notice ” has the meaning ascribed thereto in Section 11.5

1.93. “ Operative Agreements ” means those certain operating agreements, tenancy-in-common agreements, co-ownership agreements and other, similar instruments and agreements relating to the Properties and identified on Schedule M attached hereto.

1.94. “ Permitted Encumbrances ” means, with respect to the Mills Interests or the Properties: (i) the Encumbrances that are registered against the title to the Properties on the Cut-Off Date or which are Known by the Purchaser on the Cut-Off Date (except those required to be discharged pursuant to Section 4.1 ); (ii) the charges and related security in respect of the Vaughan Mills Debt; (iii) the charges and related security in respect of the St. Enoch Debt; (iv) encumbrances for real property taxes (which term includes charges, rates and assessments, and other governmental charges or levies) or charges for electricity, power, gas, water and other services and utilities in connection with any of the Properties that have accrued but are not yet due and owing or, if due and owing, are adjusted for pursuant to Section 2.3 of this Agreement; (v) to the extent that they existed as of the Cut-Off Date and are Known by the Purchaser, facility sharing, cost sharing, tunnel, pedway, servicing, parking, reciprocal and other similar agreements in respect of the Properties with neighbouring landowners and/or Governmental Authorities; (vi) any subsisting reservations, limitations, provisos, conditions or exceptions contained in the original grants of the Properties from the Crown; (vii) registrations under the Personal Property Security Act (Ontario), and any similar laws in the United Kingdom, relating to any of the leased personal property pursuant to any of the Contracts; and (viii) the Encumbrances set out on Schedule O .

1.95. “ Person ” means an individual, partnership, corporation, trust, unincorporated organization, government, or any department or agency thereof, and the successors and assigns thereof or the heirs, executors, administrators or other legal representatives of an individual.

1.96. “ Post Closing Adjustments ” has the meaning set forth in Section 2.3(d) .

 

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1.97. “ Pre-Closing Amount ” has the meaning set forth in Section 2.3(j) .

1.98. “ Profit ” means, in the case of a Subsequent Transfer, direct or indirect, of all of the interests of the Ivanhoe Transferee in either of the Vaughan Mills Property or the St. Enoch Property (but not the Vaughan Mills Peripheral Property), the positive amount, if any, equal to: (i) the total consideration received, directly or indirectly, by the Ivanhoe Transferee as a result of such Subsequent Transfer, less (ii) the aggregate of: (A) the Purchase Price allocated in this Agreement to the Mills Interests in respect of such Property; and (B) all Taxes and all expenses incurred by the Ivanhoe Transferee in connection with the acquisition of such Mills Interests (such aggregate being the “ Total Acquisition Cost ”); or in the case of a Subsequent Transfer, direct or indirect, of only part of the interests of the Ivanhoe Transferee in either of the Vaughan Mills Property or the St. Enoch Property (but not the Vaughan Mills Peripheral Property) (a “ Partial Interest ”), the positive amount, if any, equal to (x) the total consideration received, directly or indirectly, by the Ivanhoe Transferee as a result of such Subsequent Transfer, less (y) the pro rata portion of the Total Acquisition Cost for the Mills Interests in such Property applicable to such Partial Interest. In the event that any consideration received by the Ivanhoe Transferee as a result of a Subsequent Transfer is paid in Canadian dollars or U.K. pounds sterling, such amount shall, for purposes of this definition, be converted to United States dollars using the applicable conversion rate set out in Section 2.2(d) .

1.99. “ Properties ” means, collectively, the St. Enoch Property, the Vaughan Mills Property, and the Vaughan Mills Peripheral Property; and “ Property ” means any of them (subject to the provisions of Section 8 hereof).

1.100. “ Property Representations ” means the representations and warranties set out in Section 2.8(e) and also any representations of the Mills Transferors in Section 2.12(b) or (c)  relating to the Employees.

1.101. “ Purchase Price ” has the meaning set forth in Section 2.2(a) .

1.102. “ Purchaser’s Solicitors ” means Davies Ward Phillips & Vineberg LLP.

1.103. “ Qualified Designees ” means any Person, directly or indirectly, wholly-owned by Ivanhoe or, in the case of the Mills Trustee Shares, any individual nominated by Ivanhoe.

1.104. “ Rechargeable Sums ” has the meaning set forth in Section 2.3(g) .

1.105. “ Rechargeable Sums Estimates ” has the meaning set forth in Section 2.3(g) .

1.106. “ Rents ” means rents, license fees and other sums and charges paid or payable by Tenants in connection with their occupancy at the Properties and for services furnished to them.

1.107. “ Savills Agreement ” means that certain Consulting and Services Agreement, dated January 31, 2005, between FPD Savills Ltd. and Mills Global, as amended by

 

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(i) that certain letter agreement dated January 2006, (ii) that certain letter agreement dated February 28, 2006, (iii) that certain letter agreement dated March 31, 2006, (iv) that certain letter agreement dated June 2006, and (v) that certain letter agreement dated September 2006.

1.108. “ Scheduled Closing Date ” has the meaning set forth in Section 4 .

1.109. “ Statement of Adjustments ” means a statement setting out the Closing Adjustments, approved by both parties acting reasonably.

1.110. “ St. Enoch Business ” means the business of providing management services to the St. Enoch Property.

1.111. “ St. Enoch Debt ” means, as of any particular time, the outstanding principal amount of the indebtedness evidenced and/or secured by the St. Enoch Debt Documents, together with all accrued unpaid interest thereon and any other amounts payable thereunder.

1.112. “ St. Enoch Debt Credit ” has the meaning set forth in Section 2.2(a) .

1.113. “ St. Enoch Debt Documents ” means that certain £190,000,000 Facility Agreement dated 26 January 2005 among the St. Enoch Trustee and St. Enoch Trust, as borrower, and Deutsche Bank and Morgan Stanley & Co. International Limited, as joint arrangers, and Deutsche Bank, as agent, and all other documents executed in connection therewith, as the same may be amended.

1.114. “ St. Enoch Employees ” means those individuals listed in Schedule E hereto under the heading “St. Enoch”.

1.115. “ St. Enoch JV Agreement ” means that certain Amended and Restated Joint Venture Agreement relating to the St. Enoch Property among Canada Inc., St. Enoch LLC, St. Enoch Trustee, Mills UK, and Ivanhoe.

1.116. “ St. Enoch LLC ” has the meaning set forth in the introductory paragraph hereto.

1.117. “ St. Enoch Property ” means the lands and premises described in Schedule C hereto, and all easements and other rights appurtenant thereto, together with all buildings and structures located on, in or under such lands and premises and all fixed improvements and fixtures contained in, on or appurtenant to such buildings and structures, excluding only improvements and fixtures owned by the Tenants.

1.118. “ St. Enoch Trust ” has the meaning set forth in the Recitals hereto.

1.119. “ St. Enoch Trust Instrument” means the St. Enoch trust instrument relating to the St. Enoch Trust dated 22 December 2004 by the St. Enoch Trustee.

1.120. “ St. Enoch Trustee ” has the meaning set forth in the Recitals hereto.

 

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1.121. “ Subject Period ” has the meaning set forth in Section 2.3(g)(ii) .

1.122. “ Subsequent Transfer ” has the meaning set forth in Section 9 ; for greater certainty, it is confirmed that a Subsequent Transfer shall not include any transfer of the Vaughan Mills Peripheral Property or any part thereof.

1.123. “ Subsidiary ” means, as to any Person, any corporation, association or other business entity in which such Person or one or more of its Subsidiaries or such Person and one or more of its Subsidiaries owns sufficient equity or voting interests to enable it or them (as a group) ordinarily, in the absence of contingencies, to elect a majority of the directors (or Persons performing similar functions) of such entity, and any association, partnership, limited partnership, unlimited liability company, joint venture or other unincorporated business entity if more than a 50% interest in the profits or capital thereof is owned by such Person or one or more of its Subsidiaries or such Person and one or more of its Subsidiaries, and any limited partnership of which such Person is the general partner.

1.124. “ Survival Date ” has the meaning set forth in Section 2.8(f) .

1.125. “ Tax ” or “ Taxes ” means all taxes, charges, fees, levies, duties, contributions, withholdings or liabilities, imposts and other assessments, whether payable to any governmental, state, federal, provincial, local, or other governmental authority, including without limitation, all income, sales, use, goods and services, harmonized sales, value added, capital, capital gains, alternative, net worth, transfer, profit, withholding, payroll, employer health, excise, franchise, real property and personal property taxes, local improvement rates or charges, National Insurance and social security contributions, and any other taxes, customs duties, fees, assessments, royalties, duties, deductions or similar charges in the nature of a tax, including Canada Pension Plan and provincial pension plan contributions, employment insurance payments and workers’ compensation premiums, together with any instalments, and any interest surcharges, fines and penalties, imposed by any Governmental Authority, whether disputed or not.

1.126. “ Tenants ” means any tenants or licensees occupying space at any of the Properties, excluding VMSCC.

1.127. “ Third Party ” means any Person who is not one of the Mills Transferors, Mills Global, Vaughan Mills Manager, the Ivanhoe Transferee, the Joint Entities or an Affiliate of any of them.

1.128. “ Third-Party Claim ” has the meaning set forth in Section 10.1 .

1.129. “ Threshold Damage Amount ” has the meaning set forth in Section 8(a) .

1.130. “ Threshold Taking Percentage ” has the meaning set forth in Section 8(b) .

1.131. “ TMLP ” means The Mills Limited Partnership, a Delaware limited partnership.

 

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1.132. “ TMLP Indemnity ” means the indemnity by TMLP in favour of the Ivanhoe Transferee in respect of any Claims made by the Ivanhoe Transferee in respect of any breach of the representations and warranties made by any of the Mills Transferors in Section 2.8 , subject to the provisions of Section 2.8(f) , such indemnity to be in form and substance satisfactory to TMLP and the Ivanhoe Transferee, each acting reasonably.

1.133. “ Total Percentage Rent ” has the meaning set forth in Section 2.3(j) .

1.134. “ Transactions ” means the transactions contemplated by this Agreement.

1.135. “ Transfer Costs ” has the meaning set forth in Section 2.5(a) .

1.136. “ TUPE ” means the Transfer of Undertakings (Protection of Employment) Regulations 2006.

1.137. “ VAT ” means value added tax.

1.138. “ Vaughan Advisory ” has the meaning set forth in the introductory paragraph.

1.139. “ Vaughan Debt ” means, as of any particular time, the outstanding principal amount of the indebtedness evidenced and/or secured by the Vaughan Loan Documents, together with all accrued unpaid interest thereon and any other amounts payable thereunder.

1.140. “ Vaughan Development Balance ” means an amount equal to Nine Million Dollars (US$9,000,000); it is confirmed that this is a fixed amount and is not subject to any adjustment on or after Closing.

1.141. “ Vaughan Loan Documents ” means that certain Loan Agreement among Vaughan Advisory, as sole trustee of the Vaughan Trust, Vaughan Residual, and Ivanhoe II, as borrowers, Ivanhoe, as lender, and TMLP and Mills Corp., as guarantors, dated as of February 25, 2004, and all other documents executed in connection therewith, together with all amendments thereto.

1.142. “ Vaughan Loan Documents Release ” has the meaning set forth in Section 2.11(e) .

1.143. “ Vaughan Mills Amended and Restated Licensing Agreement ” has the meaning set forth in Section 2.4(b) .

1.144. “ Vaughan Mills Building Lease ” means the lease of the Vaughan Mills Property between the owners thereof, as landlord, and VMSCC, as tenant, made as of February 25, 2004.

1.145. “ Vaughan Mills Chattels ” means all equipment, inventory, vehicles, furniture, supplies and other chattels or tangible personal property located at or in the Vaughan

 

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Mills Property or used in the maintenance, repair and operation of the Vaughan Mills Property (including, without limitation, all computer hardware and software (other than Excluded Management Assets)) other than such property which is owned by any Tenant.

1.146. “ Vaughan Mills Contracts ” means all contracts and agreements with Third Parties (other than the Vaughan Mills Leases and policies of insurance) relating to the Vaughan Mills Property to which any one or more of the Mills Transferors, Vaughan Mills Manager, or the Joint Entities is a party or by which any one or more of the Mills Transferors, Vaughan Mills Manager, the Joint Entities or the Vaughan Mills Property is bound in connection with the ownership, management, maintenance, operation, cleaning, security, protection or servicing of the Vaughan Mills Property; without limiting the foregoing, it is confirmed that none of: (i) the agreements for the Vaughan Mills Management Arrangements; (ii) the Vaughan Mills Building Lease; (iii) the Operative Agreements; and/or (iv) the Vaughan Loan Documents, constitutes a Vaughan Mills Contract.

1.147. “ Vaughan Mills Co-Owners Agreement ” means that certain Amended and Restated Co-Owners Agreement, made as of October 14, 1999 and amended and restated as of February 25, 2004 between Vaughan Advisory (as trustee on behalf of the Vaughan Trust), Vaughan Residual and Ivanhoe II.

1.148. “ Vaughan Mills Employees ” means those individuals listed in Schedule E hereto under the heading “Vaughan Mills”.

1.149. “ Vaughan Mills Intellectual Property ” means all Intellectual Property used in connection with the ownership and/or operation of the Vaughan Mills Property and all promotional and marketing materials identifying the Vaughan Mills Property.

1.150. “ Vaughan Mills Leases ” means all Leases which entitle any Third Party to possess or occupy any space within the Vaughan Mills Property, together with all security, guarantees and indemnities relating thereto, in each case as amended, renewed or otherwise varied; provided that the Vaughan Mills Building Lease is not a Vaughan Mills Lease.

1.151. “ Vaughan Mills Licensing Agreement ” means that certain Agreement, dated as of October 14, 1999, between and among TMLP, Mills Corp., and Ivanhoe, successor in interest to Cambridge Shopping Centres Limited.

1.152. “ Vaughan Mills Manager ” means MillsServices Canada Corp.

1.153. “ Vaughan Mills Peripheral Property ” means the lands and premises described in Schedule B hereto, and all easements and other rights appurtenant thereto, together with all buildings and structures located on, in or under such lands and premises and all fixed improvements and fixtures contained in, on or appurtenant to such buildings and structures, excluding only improvements and fixtures owned by the tenants.

 

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1.154. “ Vaughan Mills Peripheral Property Subject Assets ” means collectively:

(a) Vaughan Residual’s 50% freehold interest in the Vaughan Mills Peripheral Property;

(b) all of the right, title and interest of Vaughan Residual and/or Vaughan Advisory, if any, in and to the Leases affecting the Vaughan Mills Peripheral Property;

(c) all of the right, title and interest of Vaughan Residual and/or Vaughan Advisory, or any Affiliate of any of them, if any, in and to the Contracts in respect of the Vaughan Mills Peripheral Property;

(d) all of the right, title and interest of Vaughan Residual and/or Vaughan Advisory, or any Affiliate of any of them, if any, in and to the Chattels relating to the Vaughan Mills Peripheral Property; and

(e) all of the right, title and interest of Vaughan Residual and/or Vaughan Advisory, if any, in and to the Intellectual Property relating to the Vaughan Mills Peripheral Property;

and all rights of Vaughan Residual and/or Vaughan Advisory, or any Affiliate of either of them, in and to any property (tangible or intangible) located at Vaughan Mills Shopping Centre or related exclusively to the Vaughan Mills Peripheral Property and/or the Vaughan Mills Shopping Centre or its operation, other than the Excluded Management Assets and the rights of the Mills Transferors or their Affiliates under this Agreement.

1.155. “ Vaughan Mills Pre-Closing Transaction ” means the transaction referred to in Section 2.1(f) .

1.156. “ Vaughan Mills Property ” means the lands and premises described in Schedule A hereto, and all easements and other rights appurtenant thereto, together with all buildings and structures located on, in or under such lands and premises and all fixed improvements and fixtures contained in, on or appurtenant to such buildings and structures, excluding only improvements and fixtures owned by the Tenants.

1.157. “ Vaughan Mills Shopping Centre ” has the meaning set forth in Recital E.

1.158. “ Vaughan Mills Subject Assets ” means collectively:

(a) the Vaughan Trust’s 50% freehold interest in the Vaughan Mills Property (it being agreed that such freehold interest includes all interest of Mills Ontario Acquisitions LLC, if any, in and to the Vaughan Mills Property);

(b) all of the Vaughan Trust’s right, title and interest, as a landlord, in and to the Vaughan Mills Building Lease;

 

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(c) all of the Vaughan Trust’s right, title and interest, if any, in and to the Vaughan Mills Leases;

(d) all of the Vaughan Trust’s right, title and interest, if any, in and to the Contracts in respect of the Vaughan Mills Property;

(e) all of the right, title and interest, if any, of the Vaughan Trust, or any Affiliate of it or of Vaughan Advisory, in and to the Vaughan Mills Chattels; and

(f) all of the right, title and interest, if any, of the Vaughan Trust, or any Affiliate of it or of Vaughan Advisory, in and to the Vaughan Mills Intellectual Property; and

all rights of the Vaughan Trust and Vaughan Advisory, and/or any Affiliate of either of them, in and to any property (tangible or intangible) located at Vaughan Mills Shopping Centre or related exclusively to the Vaughan Mills Property and/or Vaughan Mills Shopping Centre or its operation, other than the Excluded Management Assets and the rights of the Mills Transferors or their Affiliates under this Agreement.

1.159. “ Vaughan Residual ” has the meaning set forth in the introductory paragraph hereto.

1.160. “ Vaughan Trust ” has the meaning set forth in the introductory paragraph hereto.

1.161. “ Vaughan Trust Agreement ” means the amended and restated agreement captioned “VAUGHAN MILLS IRREVOCABLE GRANTOR TRUST”, dated February 25, 2004 and effective as of September 16, 1999 by and between Mills Ontario Acquisitions, L.L.C., as grantor and Vaughan Advisory, as trustee.

1.162. “ VMSCC ” has the meaning set forth in the Recitals hereto.

1.163. “ VMSCC Inter-Corporate Loans ” means all outstanding loans made to VMSCC by any of the Mills Transferors, or any of their Affiliates, or by Ivanhoe II, or any of its Affiliates. All of such loans are set out in Schedule G .

1.164. “ VMSCC Sale Proceeds ” has the meaning set forth in Section 2.1(f) .

1.165. “ VMSCC Shareholders Agreement ” means that certain Shareholders Agreement, dated as of February 25, 2004 between Vaughan Advisory (as sole trustee of the Vaughan Trust) and Ivanhoe II.

 

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2. Transfer of the Mills Interests .

2.1. Conveyance . Subject to and upon the terms and conditions herein provided:

(a) Vaughan Advisory, as sole trustee of the Vaughan Trust, hereby agrees on Closing to sell, transfer and assign to Ivanhoe II and/or to any Qualified Designees designated by Ivanhoe II, all of the Vaughan Mills Subject Assets and Ivanhoe II hereby agrees that it and/or any one or more of such Qualified Designees, shall purchase, acquire and assume the Vaughan Mills Subject Assets.

(b) Vaughan Residual hereby agrees on Closing to sell, transfer and assign (and direct Vaughan Advisory to convey legal title) to Ivanhoe II and/or to any Qualified Designees designated by Ivanhoe II, all of the Vaughan Mills Peripheral Property Subject Assets and Ivanhoe II hereby agrees that it and/or one or more of any such Qualified Designees shall purchase, acquire and assume the Vaughan Mills Peripheral Property Subject Assets.

(c) St. Enoch LLC hereby agrees on Closing to sell, transfer and assign to Ivanhoe Newco and/or to any Qualified Designees, all of the Mills Trust Units together with all rights attached or accruing to the Mills Trust Units free and clear of all Encumbrances other than Permitted Encumbrances and Ivanhoe Newco hereby agrees that it shall or shall cause one or more of any such Qualified Designees to purchase, acquire and assume all of the Mills Trust Units; provided that, upon such purchase, each such Qualified Designee must hold Mills Trust Units with a value which is greater than £250,000.

(d) Mills UK hereby agrees on Closing to sell, transfer and assign to Ivanhoe Newco and/or to any Qualified Designees designated by Ivanhoe Newco, all of the Mills Trustee Shares together with all rights attached or accruing to the Mills Trustee Shares free and clear of all Encumbrances other than Permitted Encumbrances and Ivanhoe Newco agrees that it and/or one or more of any such Qualified Designees shall purchase, acquire and assume all of the Mills Trustee Shares.

(e) Mills UK hereby agrees on Closing to sell, transfer and assign to Ivanhoe or to any Qualified Designees designated by Ivanhoe all of its right, title and interest in and to the Mills St. Enoch Inter-Company Loans and any documents acknowledging or evidencing the Mills St. Enoch Inter-Company Loans and any security in respect thereof.

(f) At the Closing, prior to completing the transactions provided for in this Section 2.1(f) , the parties shall complete all transfers of the Mills Interests provided for in this Agreement, except the transfer of the Mills VMSCC Shares, and immediately after the completion of such transfers, and subject to the other terms and conditions of this Agreement and the Closing Deliveries Escrow Agreement, the following transactions shall be completed in the following sequence: (i) firstly, Ivanhoe II shall terminate the Vaughan Mills Building Lease pursuant to Section 3.03 thereof; (ii) secondly, the Mills Transferors and Ivanhoe II shall cause VMSCC to sell, and Ivanhoe II shall purchase, all remaining assets of VMSCC for their fair market value, which the parties agree is Cdn. $100,000 (the “ VMSCC Sales Proceeds ”), and 50% of the VMSCC Sale Proceeds for such assets shall be credited in favour of the Ivanhoe Transferees as a Closing Adjustment; and (iii) lastly, Ivanhoe II shall purchase all of the Mills VMSCC Shares for $2.00.

 

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2.2. Purchase Price; Credit for Assumed Third Party Debt .

(a) The aggregate purchase price (the “ Purchase Price ”) for the Mills Interests shall be equal to Five Hundred Eight Million Two Hundred Seventy Five Thousand Dollars (US$508,275,000.00) less the Vaughan Development Balance. The Purchase Price shall be allocated among the Mills Interests as set forth on Schedule H . It is confirmed that the Closing Adjustments shall provide for the credits in favour of the Ivanhoe Transferee against the Purchase Price referred to in Section 2.1(f) . In addition, and notwithstanding the foregoing, at the Closing, the Ivanhoe Transferee shall receive a credit against the Purchase Price (the “ St. Enoch Debt Credit ”) in an amount equal to (i) one half (1/2) of the St. Enoch Debt, including any accrued and unpaid interest and other amounts payable thereunder (other than consent fees, if any, payable by the Ivanhoe Transferee pursuant to Section 2.5(a)(iii) ), that is outstanding as of Closing Date plus (ii) one half (1/2) of the Vaughan Debt, including any accrued and unpaid interest and other amounts payable thereunder, that is outstanding as of Closing. For purposes of calculating the credits pursuant to the preceding sentences, the amount of the credit in respect of the St. Enoch Debt shall be converted from UK pounds sterling into U.S. dollars in accordance with the provisions of Section 2.2(d) and the amount of the credits in respect of the Vaughan Debt and credits pursuant to Section 2.1(f) shall be converted from Canadian dollars into U.S. dollars in accordance with the provisions of Section 2.2(d) .

(b) At Closing, subject to the Closing Deliveries Escrow Agreement and Section 2.2(c) the Balance shall be paid by the Ivanhoe Transferee by wire transfer in accordance with wire instructions provided by the Mills Transferors prior to Closing.

(c) Notwithstanding any other provisions of this Agreement, if the Mills Transferors have not provided to the Ivanhoe Transferee on or before the date of Closing certificates issued by the Minister of National Revenue under Subsections 116(4) and (5.2) of the ITA in form and substance satisfactory to the Ivanhoe Transferee, acting reasonably, at Closing the Ivanhoe Transferee shall pay to the Escrowed Funds Escrow Agent, in trust, by wire transfer the sum of $81,167,206.50 (the “ Escrowed Amount ”), being the portion of the Purchase Price as is equal to the tax for which the Ivanhoe Transferee may be liable under Section 116 of the ITA as a result of the sale by the Mills Transferors of all of their respective right, title and interest in and to the Vaughan Mills Subject Assets; for greater certainty, the Escrow Amount shall be deducted from the Balance otherwise payable to the Mills Transferors pursuant to Section 2.2(b) hereof and the payment of the Escrowed Amount to the Escrowed Funds Escrow Agent shall constitute a payment by the Ivanhoe Transferees against the Purchase Price. The Escrowed Amount shall be invested as directed by the Ivanhoe Transferee, in a term deposit or other similar certificate of deposit with a Schedule 1 Canadian chartered bank. The Escrowed Funds Escrow Agent shall hold and release the Escrowed Amount and any interest thereon in accordance with the terms of the Escrowed Funds Agreement.

The parties acknowledge that in holding the Escrowed Amount, the Escrowed Funds Escrow Agent will be acting solely as a stakeholder at the request of the parties and for their convenience, that the Escrowed Funds Escrow Agent, acting in that capacity, shall not be deemed to be the agent of any of the parties, and the Escrowed Funds Escrow Agent shall not be liable to any of the parties for any act or omission on its part and shall be entitled to rely upon

 

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instructions of the Ivanhoe Transferee relating to the investment of the Escrowed Amount in accordance with this Section 2.2(c) . The Mills Transferors and the Ivanhoe Transferee shall jointly and severally indemnify and hold the Escrowed Funds Escrow Agent harmless from and against all Claims, including reasonable attorneys’ fees and disbursements (including the reasonable cost of services provided to itself in respect of any dispute under the Escrowed Funds Agreement), incurred in connection with the performance of the duties of the Escrowed Funds Escrow Agent under the Escrowed Funds Agreement other than Claims resulting from the gross negligence or wilful misconduct of the Escrowed Funds Escrow Agent. The Escrowed Funds Agreement shall provide that the Escrowed Funds Escrow Agent may resign at any time by written notice of such resignation to the other parties thereto, provided that such resignation shall not take effect until appointment of a successor escrow agent and the acceptance of such appointment by such successor escrow agent. Such agreement shall also provide that if there is any dispute about the interpretation of such agreement or the rights and obligations of the parties thereto, or the propriety of any action contemplated by the Escrowed Funds Escrow Agent, the Escrowed Funds Escrow Agent may seek instructions from a court of competent jurisdiction in Ontario or deposit the entire Escrow Amount then in its possession with a court of competent jurisdiction in Ontario and thereupon shall be fully relieved from its duties and obligations under such agreement. The provisions of this Section 2.2(c) shall survive, and shall not merge on, Closing.

(d) Whenever this Agreement requires a calculation of the exchange rate between the Canadian dollar and the U.S. dollar, such exchange rate shall be 1.1105 Canadian dollars for each U.S. dollar. Whenever this Agreement requires a calculation of the exchange rate between U.K. pounds sterling and the U.S. dollar, such exchange rate shall be 1.8927 US dollars for each U.K. pound sterling.

(e) The parties confirm that the portion of the Purchase Price allocated to the purchase of the Mills VMSCC Shares is $2.00.

2.3. Adjustments to Purchase Price .

(a) Except as otherwise expressly provided in Sections 2.1(f), 2.2, 2.3 or 2.12(b) herein: (i) the Mills Transferors shall be responsible for all expenses and liabilities, and shall be entitled to receive all revenues accrued, in respect of the Mills Interests for the period up to, and including, the Closing Adjustment Date; and (ii) for the period from, but excluding, the Closing Adjustment Date, the Ivanhoe Transferee shall be responsible for all expenses and liabilities accruing in respect of the Mills Interests and shall be entitled to all revenues accruing in respect of the Mills Interests. Except as otherwise expressly provided in this Agreement, all adjustments for basic rent, additional rents, percentage rents, parking income, damage/security deposits and interest thereon, if any, prepaid rents and interest thereon, if any, and other income and operating expenses, utilities, taxes (including local improvement charges and assessments and business taxes) and other adjustments shall be made in accordance with the usual practices in the city in which the relevant Property is situated. Unless otherwise provided in this Agreement, all adjustments in respect of each of the Vaughan Mills Subject Assets and the Mills Interests relating to the St. Enoch Property, respectively, shall be made as if the freehold owners of the relevant Property (in the case of the Vaughan Mills Property) and the

 

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owners of the units of St. Enoch Trust (in the case of the St. Enoch Property) received all revenues and paid all expenses and other liabilities in respect of such Property directly, and there shall be no adjustments for any amounts payable under the Vaughan Mills Building Lease or for any assets of VMSCC. All Closing Adjustments to be made in respect of the St. Enoch Property shall be calculated in UK pounds sterling and all Closing Adjustments to be made in respect of the Vaughan Mills Shopping Centre shall be calculated in Canadian dollars, but solely for the purposes of calculating the Balance, all such Closing Adjustments shall be converted into U.S. dollars using the applicable exchange rate set out in Section 2.2(d) . All Post Closing Adjustments in respect of the St. Enoch Property shall be calculated in UK pounds sterling and all Post Closing Adjustments in respect of the Vaughan Mills Shopping Centre shall be calculated in Canadian dollars, and such Post Closing Adjustments shall not be converted to U.S. dollars. The parties acknowledge that any payments made under this Section 2.3 (other than payments made pursuant to Sections 2.3(m), (n), (o) or (r)) , whether made at Closing or following Closing and whether made by the Mills Transferors or the Ivanhoe Transferee, shall be deemed to be adjustments to the Purchase Price.

(b) Without limiting the generality of the foregoing, the parties will adjust the following items, in the manner provided for in this Section 2.3 :

(i) 50% of all rents (basic, percentage and additional) under the Leases;

(ii) 50% of security deposits and prepaid rent (and interest thereon, if any) paid under the Leases;

(iii) 50% of real property taxes and local improvement rates and charges and recoveries thereof under the Leases;

(iv) 50% of utilities and fuel accounts and recoveries thereof under the Leases;

(v) 50% of any amounts payable under the Contracts and Rechargeable Sums under the Leases (without duplication of the adjustment made pursuant to Section 2.3(b)(i));

(vi) 50% of accrued unpaid interest under the St. Enoch Debt;

(vii) 50% of prepaid interest under the Vaughan Debt;

(viii) 50% of all unpaid Leasing Costs payable (whether before or after Closing) in respect of the then current term of any of the Leases in existence as of the Closing Adjustment Date;

(ix) 100% of the Ivanhoe Transferee’s costs, if any, of replacing the Excluded Management Assets with comparable software applications;

 

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(x) subject to the provisions of this Agreement, 50% of all other items reasonably capable and properly the subject of adjustment in connection with the ownership of the Mills Interests or the Properties of whatsoever nature; and

(xi) 50% of all fees payable under the Management Arrangements.

It is agreed that no Closing Adjustment shall be made with respect to insurance premiums in respect of the Vaughan Mills Shopping Centre and that the Ivanhoe Transferee shall not assume or take an assignment of any existing insurance policies (including liability insurance policies) in respect of such Properties. In the case of the St. Enoch Property, there shall be an adjustment for 50% of all pre-paid insurance premiums in respect of such Property, it being agreed that the Ivanhoe Transferee will take an assignment of the existing insurance policies (including liability insurance policies) in respect of the St. Enoch Property. The parties shall also make the Closing Adjustments provided for in Sections 2.1(f) and 2.12(b) .

(c) The parties shall, each acting reasonably, agree upon the Statement of Adjustments not later than the second Business Day prior to the Scheduled Closing Date and if there is any dispute in respect of numerical calculations relating to the Closing Adjustments such dispute shall be resolved by PricewaterhouseCoopers LLP, Canada with the assistance of such other experts, if any, as the latter shall designate, provided that neither PricewaterhouseCoopers LLP, Canada nor any such experts shall have any right or discretion to resolve disputes relating to interpretation of the terms of this Section 2.3 or any other terms of this Agreement.

(d) If the final cost or amount of any item which is to be adjusted on the Closing Adjustment Date cannot be determined at the Closing Adjustment Date, then an initial adjustment for such item shall be made as of the Closing Adjustment Date, such amount to be estimated by the parties, acting reasonably, as of the Closing Adjustment Date on the basis of the best evidence available as of the Closing Adjustment Date as to what the final cost or amount of such item will be. All adjustments to the Purchase Price which are finalized or otherwise become known after the Closing Adjustment Date (the “ Post Closing Adjustments ”) shall be adjusted on a post-closing basis once they have been finalized or otherwise become known and such Post Closing Adjustments shall also include any revisions to the Closing Adjustments if they have been incorrectly determined or omitted on the Statement of Adjustments. In each case when a Post Closing Adjustment is determined, the Mills Transferors or the Ivanhoe Transferee, as the case may be, shall, within 30 days of determination, provide a complete statement thereof, together with particulars relating thereto in reasonable detail, to the other and within 30 days thereafter the parties hereto shall make a final adjustment as of the Closing Adjustment Date for the Post Closing Adjustment in question. Any Post Closing Adjustments payable to the Mills Transferors shall be paid to the Mills Transferors, or as they may in writing direct, and any Post Closing Adjustments payable to the Ivanhoe Transferee shall be paid to the Ivanhoe Transferee or as it may in writing direct.

(e) In the case of any dispute between the parties hereto in respect of numerical calculations relating to the Post Closing Adjustments, such calculation of Post Closing

 

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Adjustments shall be determined by PricewaterhouseCoopers LLP, Canada, with the assistance of such other experts, if any, as the latter shall designate provided that neither PricewaterhouseCoopers LLP, Canada nor any such experts shall have any right or discretion to resolve disputes relating to interpretation of the terms of this Section 2.3 or any other terms of this Agreement. The cost of such determination shall be shared equally between the parties hereto. Either party may refer any such dispute relating to numerical calculations to PricewaterhouseCoopers LLP, Canada for such determination and such determination shall be final and binding on the parties hereto.

(f) The Mills Transferors and TMLP shall be jointly and severally liable for any Post Closing Adjustments owing by any of the Mills Transferors pursuant to the provisions of this Agreement and any other obligations of the Mills Transferor pursuant to the provisions of Section 2.3 , and the Mills Transferors and TMLP shall execute and deliver on the Closing Date an undertaking to readjust and pay the amount of any Post Closing Adjustments owing by the Mills Transferors pursuant to the provisions of this Agreement. The Ivanhoe Transferee and Ivanhoe shall be jointly and severally liable for any Post Closing Adjustments owing by the Ivanhoe Transferee pursuant to the provisions of this Agreement, and the Ivanhoe Transferee and Ivanhoe agree to execute and deliver on the Closing Date an undertaking to readjust and pay the amount of any Post Closing Adjustments owing by the Ivanhoe Transferee pursuant to the provisions of this Agreement. Notwithstanding any other provision of this Section 2.3, except for any Post Closing Adjustments referred to in Section 2.3(m) , all adjustments and Post Closing Adjustments to be made pursuant to this Section 2.3 shall, in any event, be completed on or before December 31, 2007 (the “ Final Adjustment Date ”) and no claim for any re-adjustment may be made by any party thereafter. For greater certainty, it is agreed that the provisions of Sections 2.3(m) and (r)  are not subject to the time limitations set out in the preceding sentence since any amounts payable pursuant thereto do not constitute adjustments or Post-Closing Adjustments.

(g) The parties acknowledge that under the terms of the Leases, portions of certain payments, such as real property taxes and operating costs, although paid by the landlord, are charged to and payable by the Tenants under such Leases (the “ Rechargeable Sums ”) and are collected from such Tenants in monthly instalments on the basis of the landlord’s estimates (the “ Rechargeable Sum Estimates ”). The Rechargeable Sum Estimates are subject to adjustment with the Tenants when the total amounts of the Rechargeable Sums are finally determined. For greater certainty, Rechargeable Sums shall not include any expenditures or any portion thereof which are not recoverable from the Tenants. It is agreed that, with respect to the Rechargeable Sums and the Rechargeable Sum Estimates, there shall be no adjustments on Closing for Rechargeable Sums and Rechargeable Sums Estimates but as soon as reasonably possible after Closing. Such adjustments shall be made as follows:

(i) as soon as reasonably possible after the Closing, the parties shall adjust for 50% of Rechargeable Sums, based on the principles set forth herein;

(ii) the Ivanhoe Transferee shall provide to the Mills Transferors, at least 30 days before the Final Adjustment Date, a statement which sets out the amounts of the Rechargeable Sum Estimates collected from each Tenant, as well as the

 

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amounts expended on account of the Rechargeable Sums, in each case for the period (the “ Subject Period ”) from the beginning of the then current lease year, or other period relevant to the computation and recovery of Rechargeable Sums pursuant to the Leases, as appropriate, until (and including) the Closing Adjustment Date; and

(iii) the adjustments to Rechargeable Sums shall be done on the basis that:

 

A.

if the landlord under the Leases has collected pursuant to the Rechargeable Sum Estimates more than it has expended on account of the Rechargeable Sums for such Subject Period, 50% of the amount of such difference shall be paid to the Ivanhoe Transferee and the Ivanhoe Transferee shall be responsible for, and make, the required adjustments with the Tenants in respect of such over-collection in accordance with the terms of the Leases; and

 

B.

if the landlord under the Leases has collected pursuant to the Rechargeable Sum Estimates less than it has expended on account of the Rechargeable Sums for such Subject Period, 50% of the amount of such difference shall be paid to the Mills Transferors, and the Ivanhoe Transferee shall be entitled, subject to the terms of the Leases, to recover such Rechargeable Sums from Tenants and to retain the amount collected from Tenants in respect of such difference.

The Ivanhoe Transferee shall be responsible to conclude all final reconciliations and to make all payments and satisfy all obligations with all Tenants relating to the Rechargeable Sums and Rechargeable Sum Estimates; provided, however, that the parties shall readjust any amount which either the Ivanhoe Transferee or the Mills Transferors determine, acting reasonably, prior to the Final Adjustment Date, as a result of such final reconciliations with Tenants or as a result of an audit by a Tenant, was incorrectly or inaccurately adjusted or neglected to be adjusted between the Ivanhoe Transferee and the Mills Transferors pursuant to the terms hereof.

(h) The parties hereby agree that there shall be an adjustment in respect of all Leasing Costs payable (whether before or after Closing) in respect of the then current term of any of the Leases in existence as of the Closing Adjustment Date and the Mills Transferors shall be responsible for the payment of 50% of any such Leasing Costs that have not been paid prior to the Closing, and that the Mills Transferors shall be responsible for 50% of all leasing fees and commission payable (whether before or after Closing) in respect of the then current term of any of the Leases in existence as of the Closing Adjustment Date and in each

 

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case such amount shall be shown as an adjustment in favour of the Ivanhoe Transferee on the Statement of Adjustments if unpaid to the parties entitled thereto by Closing.

(i) It is also agreed that:

(i) except as otherwise provided for in this Agreement, the Ivanhoe Transferee shall not be entitled to be paid or receive the benefit of the Mills Transferors’ 50% interest in any Arrears nor will the Mills Transferors be entitled to any credit for any such Arrears. “ Arrears ” means all rents and other amounts due and payable under the Leases for any period prior to or ending on the Closing Adjustment Date and also, in the case of the St. Enoch Property, any rents and amounts that become due and payable as a result of rent reviews after the Closing Adjustment Date in respect of any period prior to or ending on the Closing Adjustment Date (but only such period). The Ivanhoe Transferee shall use reasonable efforts to collect such Arrears following the Closing Date, provided that the Ivanhoe Transferee shall not be obliged to distrain for rent, terminate any Lease or bring any action for payment of indebtedness, and the Mills Transferors shall not take any actions or proceedings of any nature against any Tenants to collect any such Arrears. If, after the Closing Date, any owner of a Property or any Joint Entity receives any monies from any Tenant who owes Arrears, such monies shall be applied as follows:

 

A.

first, against any rent and other amounts owing by such Tenant in respect of the month in which the Closing Date occurs;

 

B.

second, against any rent (including arrears of rent) and other amounts owing by such Tenant in respect of any time after the month in which the Closing Date occurs through and including, (i) in the case of monies collected in respect of Vaughan Mills Shopping Center, the calendar month in which such monies are received and (ii) in the case of monies received in respect of the St. Enoch Property, the calendar quarter in which such monies are received;

 

C.

third, against any third party costs (including reasonable accounting and legal costs) incurred in respect of the collection of such monies; and

 

D.

thereafter, the excess, if any, against the Arrears; if any money is payable to the Mills Transferors in accordance with this Clause D, the Ivanhoe Transferee shall pay to the Mills Transferors within 10 Business Days after collection thereof, 50% of such monies, together with a statement as to the amount of such Arrears and the application of the proceeds thereof; and

 

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(ii) if there are any realty or business tax appeals for the period prior to the Closing Adjustment Date, the Ivanhoe Transferee or the Joint Entities shall be entitled to continue such appeals and the Mills Transferors shall be entitled to receive 50% of any payment or other benefits resulting therefrom that relate to the period prior to the Closing Adjustment Date (except to the extent that such payments are properly payable to any Tenants under the terms of their Leases, which amounts, net of all costs recoverable from the concerned Tenants, if any, shall be paid by the Ivanhoe Transferee or the Joint Entities to such Tenants).

(j) There shall be no adjustment at the Closing for percentage rent payable under the Leases. As soon as reasonably possible after the Closing, after the expiry of the percentage rent year in which the Closing Adjustment Date occurs, the percentage rent, if any, earned under each of the Leases shall be readjusted, if necessary. The adjustments and readjustments shall be done on the following basis: the parties shall calculate the aggregate percentage rent payable by each Tenant to the landlord pursuant to its Lease for such percentage rent year (the “ Total Percentage Rent ”). The Mills Transferors shall be entitled to 50% of the Pre-Closing Amount and the Ivanhoe Transferee shall be entitled to the balance of the Total Percentage Rent. The “ Pre-Closing Amount ” means the Total Percentage Rent multiplied by a fraction, the numerator of which is the number of days from and including the first day of such percentage rent year to, and including, the Closing Adjustment Date and the denominator of which is the number of days in such percentage rent year.

(k) After Closing, the Ivanhoe Transferee shall cause each of the Joint Entities to make all required tax filings in respect of the current taxation year, as well as any prior taxation year for which filings have not been made as of Closing, and shall consult with the Mills Transferors in respect of the preparation of same. Each of the Ivanhoe Transferee and the Mills Transferors shall provide the other and its auditors, during normal business hours at any time and from time to time after Closing to and until the Final Adjustment Date (or, in the case of a tax reassessment, at any time after Closing), upon reasonable prior notice, access to its books, files and records relating exclusively to the Properties, the Joint Entities or the Mills Interests, for the purpose of preparation of tax returns or other filings for the Joint Entities, calculating or verifying the amount of any Closing Adjustments, percentage rent, Rechargeable Sums and Rechargeable Sum Estimates, obtaining information required to complete any audit of the financial statements of any of the Joint Entities or any of the parties hereto or their Affiliates, or any other legitimate business purpose.

(l) There shall be no adjustments either on or after the Closing Adjustment Date in respect of any amounts payable after the Closing Adjustment Date to the parties hereto, any of their Affiliates, or the Joint Entities (or any credits, benefits, entitlements or reimbursements, existing or future, in their favour) in respect of charges, levies or other amounts that have been paid by any such Persons to any Governmental Authority or other public authority, or any utility, in respect of development of or construction on or relating to the Properties.

(m) If at any time prior to the sixth (6 ^th ) anniversary of the Closing Date, it is ascertained that, in respect of any period prior to or ending on the Closing Adjustment

 

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Date, there are any Taxes (other than real property and personal property taxes) payable by any of the Joint Entities that have not been paid on or before the Closing Adjustment Date or adjusted for as a Closing Adjustment on the Closing (including any Taxes payable in respect of any tax returns or other filings for the Joint Entities for the current tax years of such Joint Entities), the Mills Transferors shall be responsible for 50% of any such amounts and the Ivanhoe Transferee shall be responsible for 50% of any such amounts, including in each case all penalties and interest payable in respect thereof notwithstanding that such amount is claimed after the Final Adjustment Date, except that the Mills Transferors shall be responsible for 100% of any Taxes (including all interest and penalties payable) in respect of any withholdings or remittances required pursuant to Applicable Laws in respect of any amounts paid to any Mills Entities by any of the Joint Entities, whether before or after Closing.

(n) Immediately prior to Closing, all of the monies in the possession of the St. Enoch Trustee (in its own capacity or as trustee of the St. Enoch Trust) or VMSCC, as the case may be, on the Closing Adjustment Date that are the property of such Joint Entity (except to the extent attributable to the period from and after the Closing Adjustment Date, all of which monies belong, and shall be distributed to, the Ivanhoe Transferee) shall be distributed to the Mills Transferors and the Ivanhoe Transferee in accordance with the terms of the applicable Operative Agreements (including, without limitation, the St. Enoch Trust Instrument), but without regard to any provisions thereof which call for the establishment or retention of reserves, and the provisions of Section 2.3(a) above, provided that any monies to which any Person is so entitled shall first be applied in payment of all accrued and unpaid interest on all outstanding loans to the relevant Joint Entity made by such Person.

(o) At Closing following the sale by VMSCC of all of its remaining assets as described in Section 2.1(f)(ii ) and prior to the purchase by Ivanhoe II of the Mills VMSCC Shares as described in Section 2.1(f)(iii) (and in addition to any amounts distributed under Section 2.3(n)) the parties agree to cause VMSCC to distribute all of the VMSCC Sale Proceeds to the Vaughan Trust, as to 50% of such proceeds, and Ivanhoe II, as to 50% of such proceeds, in accordance with such parties respective shareholdings in VMSCC at such time. The parties agree that any amount otherwise payable by VMSCC as described in this Section 2.3(o) to the Vaughan Trust but withheld on account of withholding tax obligations shall be deemed to be received by the Vaughan Trust for purposes hereof.

(p) Prior to the Closing Adjustment Date, all capital calls made by any Joint Entities prior to or ending on the Closing Adjustment Date that have not yet been funded by the applicable Person shall be satisfied in full. The Mills Fees and the IC Fees payable in respect of the period prior to or ending on the Closing shall be reflected in the Statement of Adjustments. To the extent that the Mills Fees or the IC Fees are not determined between the parties at Closing, then any such undetermined fees shall be treated as a Post-Closing Adjustment in accordance with Section 2.3(d) .

(q) The adjustments shall include an adjustment in favour of the Ivanhoe Transferee for all accrued GST payable by VMSCC in respect of periods prior to the Closing Adjustment Date and the Ivanhoe Transferee shall cause VMSCC to pay all such accrued GST when it becomes due and payable.

 

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(r) Any monies and all rental cheques received by the Mills Transferors and/or VMSCC from Tenants in respect of the period after (but excluding) the Closing Adjustment Date shall be held in trust by the Mills Transferors and/or VMSCC for the Ivanhoe Transferee and remitted (and in the case of rental cheques endorsed (without recourse) in favour of, and delivered) to the Ivanhoe Transferee or as it may direct following the Closing.

(s) The Mills Transferors shall be credited, as a Closing Adjustment, with an amount equal to the Balance (as determined without reference to this Section 2.3(s) ) multiplied by .0001164 per day for the period commencing on (and including) the first day after the Closing Adjustment Date and ending on October 4, 2006, unless the Closing is delayed beyond October 5, 2006 as a result solely of the default of the Ivanhoe Transferees in which case such period shall end on the Closing Date.

(t) All of the provisions of this Section 2.3 shall survive, and shall not merge on, Closing.

2.4. Name Licensing .

(a) On the Closing Date, the Mills Transferors shall cause TMLP to execute an Assignment of Intellectual Property, in the form attached as Schedule S .

(b) On the Closing Date, TMLP and Ivanhoe II shall execute an amendment and restatement of the Vaughan Mills Licensing Agreement (the “ Vaughan Mills Amended and Restated Licensing Agreement ”), in the form attached hereto as Schedule Q .

(c) On the Closing Date, TMLP, Mills Corp., and Ivanhoe shall execute an amendment to the Master Agreement (the “ Master Agreement Amendment ”), in the form attached hereto as Schedule R .

2.5. Transfer Costs .

(a) The Ivanhoe Transferee shall pay the following costs (collectively, “ Transfer Costs ”):

(i) all transfer taxes, GST, VAT, provincial sales tax, stamp duty (including stamp duty land taxes), other land taxes and any other similar taxes that will be due in connection with the transfer of the Mills Interests and the Properties whether arising from a reassessment or otherwise and all city, provincial and national charges to record and file documents, other than any costs and registration fees payable in connection with the discharge of Encumbrances, if any, which are to be discharged by any of the Mills Transferors;

(ii) the filing fees (and applicable GST) in respect of Ivanhoe II’s short-form merger notification filing and ARC request pursuant to the Competition Act, which filing was made on or about August 16, 2006; and

 

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(iii) any loan consent, loan assumption, or other fees payable to the lenders or other finance parties under the St. Enoch Debt as a result of or in connection with the transfer of the Mills Interests hereunder. The Ivanhoe Transferee hereby confirms no such fees are payable with respect to the Vaughan Debt.

(b) Ivanhoe II hereby indemnifies and saves the Mills Transferors and their shareholders, directors, officers, employees, advisors and agents harmless from all Claims incurred, suffered or sustained as a result of the failure by the Ivanhoe Transferee to:

(i) pay any Transfer Costs, and

(ii) file any returns, certificates, filings, election notices or other documents required to be filed by the Ivanhoe Transferee or the Joint Entities with any federal, provincial or other taxing authorities in connection with the conveyance or transfer to the Ivanhoe Transferee of the Mills Interests and the Properties.

(c) Without limiting the foregoing, Ivanhoe II acknowledges that the Purchase Price does not include GST payable in respect of the purchase of the Vaughan Mills Subject Assets or the Vaughan Mills Peripheral Property Subject Assets pursuant to this Agreement and that it shall be responsible for th